(Bloomberg) -- DeepSeek is steeply raising the prices for its flagship V4 models, bringing the low-cost provider's rates closer to those of major artificial intelligence rivals.
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A new peak-hour pricing will increase the Chinese company's rates by more than four times from the current levels, according to a post on its website Thursday. The price increases will take effect on Aug. 16.
Going forward, users will pay $1.32 for 1 million output tokens during peak hours, and half that during off-peak hours, for the DeepSeek-V4-Flash model. That's up from $0.28 for 1 million tokens previously.
The increase still leaves DeepSeek's pricing below that of some of its main competitors. Anthropic PBC's state-of-the-art Fable 5 service sets that pricing at $50. DeepSeek gave an advance warning last week that it would hike prices, without specifying the exact increases.
DeepSeek's V4-Pro model will cost $3.96 for 1 million tokens at peak hours and half that at non-peak hours, it said. That's up from the current $0.87 per million tokens.
The Hangzhou-based AI lab said it's revising and adjusting the pricing "to allocate resources more reasonably." The dynamic pricing strategy is designed to encourage developers and enterprises to shift their work to less congested periods.
DeepSeek's strategy has sparked a global debate in recent weeks over the cost of high-performing AI tools. Its pricing has been so far out of the usual range for AI models that it has prompted the idea of a DeepSeek "death zone," where costlier or less capable models would be obviated. It's also raised questions about the initial public offering plans of OpenAI and Anthropic because of the risks the firm poses to their profits and business models.
DeepSeek is in the middle of a massive fundraising and has begun preparations for an initial public offering as soon as this year, Bloomberg has reported. Founder Liang Wenfeng will for the first time need to balance investor expectations, rapid market expansion and the intense capital demands of building out costly computing infrastructure.
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